Lennox International (LII) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached $1.5 billion, up 3% year-over-year, with segment profit at $354 million and a record segment margin of 23.6%, up 170 bps year-over-year.

• Adjusted EPS for Q2 was $7.82, up 14% year-over-year, and operating cash flow was $87 million.

• Both Home Comfort Solutions (HCS) and Building Climate Solutions (BCS) segments delivered revenue growth and margin expansion despite industry headwinds and inflationary pressures.

• Full-year 2025 guidance was raised, with adjusted EPS expected at $23.25–$24.25 and revenue growth of 3%, reflecting strong execution and improved visibility.

• Strategic partnerships with Samsung and Ariston expanded the product portfolio, with meaningful contributions expected from 2026 onward.

Financial highlights

• Segment margin reached a record 23.6%, up 170 basis points year-over-year.

• Adjusted EPS for Q2 was $7.82, a 14% increase year-over-year.

• Net income for Q2 2025 was $278 million, up from $246 million in Q2 2024.

• Free cash flow for Q2 was $58.7 million, with full-year guidance of $650–$800 million.

• $300 million in share repurchases year-to-date; new $1 billion repurchase authorization.

Outlook and guidance

• Full-year adjusted EPS guidance raised to $23.25–$24.25, with revenue growth expected at 3%.

• Free cash flow guidance for the year remains $650–$800 million; capital expenditures projected at $150 million.

• Sales volumes projected to decline 6% for the year, improved from prior estimate of down 9%.

• Price/mix benefit expected at 9% for the year; cost inflation now forecast at 6% (down from 9%).

• Interest expense expected at $30 million; tax rate between 19–20%.